The Drivers of Growth in China’s New Normal – China Real Time Report – WSJ

As China’s economic growth slows and the manufacturing and industrial sectors face declines, many companies are trying to determine whether or where they can tap into more growth.

The old drivers of the economy, including the middle class and the export sector, are out. What’s in for China’s so-called “new normal” is the upper-middle class and the service sector.

Affluent shoppers under the age of 35 and Internet surfers will push China’s consumer market up to $6.5 trillion in sales by 2020, an increase of 54% from 2015, according to consultancy the Boston Consulting Group. Upper-middle class households, defined as those making between $24,001 and $46,000 in annual income, will double to 100 million in population by 2020 and account for 30% of all urban households in the country.

Consumption is not isolated from the slowdown, but China hasn’t stopped shopping, consultancy The Boston Consulting Group said in a recent report. Consumption growth this year is poised to outpace GDP growth, which economists expect to range between 6% and 6.6%, BCG said.

Source: The Drivers of Growth in China’s New Normal – China Real Time Report – WSJ

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